To ask Her Majesty’s Government what assessment they have made of the effectiveness of the law in respect of the responsibilities of (1) leaseholders, and (2) property management companies, for the upkeep of communal areas in blocks of flats.
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in doing so, I want to say that I am so proud to be able to ask a Question on your last day, Lord Speaker. You have been an exceptional Lord Speaker; thank you so much.
The Government are committed to promoting fairness and transparency for homeowners and ensuring that leaseholders are protected from abuse and poor service. Following Law Commission reports on enfranchisement, right to manage and commonhold, the Government are taking forward a comprehensive programme of reform to end unfair practices in the leasehold market. We are also considering the recommendation from the independent working group on property agents, chaired by the noble Lord, Lord Best.
My Lords, I refer the House to my relevant interests as set out in the register. Does the noble Lord accept that, in many cases, leaseholders are trapped, paying expensive fees to management companies for the care and upkeep of communal areas or the property that they live in, and that the provisions that enable fees to be challenged and management companies to be replaced are not fit for purpose and need to be radically updated to place real control and choice in the hands of the leaseholders?
My Lords, we believe very strongly that any fees and charges should be justifiable, transparent and communicated effectively and that there should be a clear route to challenge or address things if they go wrong. That is why we commissioned the noble Lord, Lord Best, to do his report.
My Lords, on 5 January, when I described leaseholders as
“a relic from a feudal age”,
my noble friend replied:
“There is no doubt that in this country we are unique in having leasehold. We need to focus on reform, which will take this forward to a position similar to that in Scotland or on the continent, where people are co-owners of their property.”—[Official Report, 5/1/21; col. 9.]
Is legislation on its way so that everyone can benefit from my noble friend’s ambition?
My Lords, my noble friend knows that the Government wish to extend the benefits of freehold ownership to more homeowners; that is why we are establishing a commonhold council to prepare homeowners and the market for the widespread take-up of commonhold. We share that same drive and ambition to change things.
My Lords, too many property managers and owners have taken advantage of tenants by imposing unreasonable service charges, and often trading with linked companies, so I appreciate the Government’s commitment to finding a clear route to challenge for leaseholders. But what about people who live in sheltered housing—the vulnerable people who really are not able to look after themselves when confronted with an unreasonable agent making outrageous demands?
My Lords, the Government are considering under what circumstances fees and charges for leaseholders and for people in sheltered housing are justified and whether they should be capped or banned. That will form part of our response to the review by the noble Lord, Lord Best.
My Lords, can the Minister give the House any indication of progress on the leasehold reform issue? The recent White Paper was welcomed by many people, including my friends on the Isles of Scilly who feel that they are very badly treated. How many of the recommendations in that White Paper might appear in legislation soon?
My Lords, we are starting off with a two-step approach to reform. A ground rents Bill will be announced in the Queen’s Speech. It will take approximately a year to prepare the wider reform proposals around enfranchisement, right to manage and other matters covered by the Law Commission.
Last night, the Government refused yet again to amend the Fire Safety Bill to protect leaseholders from charges levied for the replacement of defective fire-resistant cladding. I repeat my noble friend Lady Pinnock’s concluding question:
“if it is not the right Bill, where is the Government’s Bill … that will keep the Government’s pledge that leaseholders would not have to face the unaffordable consequences of fire safety defects?”—[Official Report, 28/4/21; col. 2371.]
That seems already to be a broken promise. How will the Government now stop bankruptcy proceedings and loss of homes?
My Lords, the Government have already put an unprecedented sum of money—over £5 billion—on the table to support the remediation of unsafe cladding. We made it very clear that the steps that we are taking can be covered without statutory intervention.
My Lords, I declare my interests as in the register. If a company knowingly supplies substandard goods and dozens of people die because of it, but the company walks away with billions of pounds of profit without renovating or replacing all the other substandard products that they have already put in place, is that just good business practice?